Item 3.02. Unregistered Sale of Equity Securities
On October 19, 2021, in connection with the closing of Penn National Gaming,
Inc.'s (the "Company") previously announced acquisition of Score Media and
Gaming Inc., a British Columbia corporation ("theScore"), and pursuant to the
Arrangement Agreement, dated as of August 4, 2021, by and among the Company,
1317774 B.C. Ltd., a British Columbia corporation and an indirect wholly owned
subsidiary of the Company ("Purchaser"), and theScore (as amended, the
"Arrangement Agreement"), the Company issued a total of 12,319,340 shares of
common stock, par value $0.01 per share, of the Company ("Company Common
Stock"), 311,119 options to purchase Company Common Stock ("Company Option") and
472,588 restricted stock units covering Company Common Stock ("Company RSU") and
Purchaser issued a total of 768,441 shares of Purchaser that are exchangeable
into Company Common Stock ("Exchangeable Shares"), in each case to holders of
Class A Subordinate Voting Shares, Special Voting Shares, options or restricted
share units of theScore, as applicable. The transactions contemplated by the
Arrangement Agreement were implemented by way of a court-approved plan of
arrangement (the "Plan of Arrangement") under Division 5 of Part 9 of
the Business Corporations Act (British Columbia), as amended (the
"Arrangement").
Each Exchangeable Share will be exchangeable into one share of Company Common
Stock (the "Exchangeable Share Exchange Ratio") at the option of the holder,
subject to certain adjustments. In addition, Purchaser may require all
outstanding Exchangeable Shares to be exchanged into shares of Company Common
Stock at any time following the fifth anniversary of the closing, or earlier
under certain circumstances. Holders of Exchangeable Shares will be entitled to
receive dividends economically equivalent to the dividends declared by the
Company with respect to the Company Common Stock, unless there is an adverse tax
consequence to Purchaser and Purchaser elects to equitably adjust the
Exchangeable Share Exchange Ratio in lieu of paying such equivalent dividend.
The Company Options and Company RSUs will continue to be governed by
substantially the same terms and conditions applicable to the corresponding
option or restricted share unit award granted by theScore prior to the
consummation of the Arrangement (including, but not limited to, the term to
expiration, conditions to and manner of exercising, if applicable, and the
vesting schedule).
The shares of Company Common Stock, Company Options, Company RSUs and
Exchangeable Shares (collectively "Issued Securities") were issued in reliance
upon Section 3(a)(10) of the Securities Act of 1933, as amended (the "Securities
Act"). The Supreme Court of British Columbia (the "Court") was advised that the
Company and Purchaser intended to reply upon Section 3(a)(10) of the Securities
Act in connection with the issuance of the Issued Securities based upon the
Court's approval of the Arrangement. Following a hearing that was open to any
person entitled to receive Issued Securities pursuant to the Arrangement
Agreement and the Plan of Arrangement, the Court on October 14, 2021 approved
the Arrangement and determined that the Arrangement was procedurally and
substantively fair and reasonable to those parties affected by the Arrangement,
including all persons who were entitled to receive Issued Securities pursuant to
the Arrangement.
Item 8.01. Other Events
On October 19, 2021, the Company issued a joint press release, a copy of which
is attached as Exhibit 99.1 and incorporated by reference in this Current Report
on Form 8-K, announcing the completion of the transactions contemplated by the
Arrangement Agreement and the Plan of Arrangement.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release, dated October 19, 2021, issued by Penn National Gaming,
Inc. and Score Media and Gaming Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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